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Ext. PublicationSpecialty Tax Spotlight — Ad Valorem and Severance Tax Planning Part 3
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Specialty Tax Spotlight
In the final part of this three-part series on Specialty Tax Spotlight, Mayur Naik, Tanner Owens and Stephen Arredondo focus on actionable steps to capture ad valorem and severance tax opportunities. From leveraging look-back periods to engaging in proactive documentation, these strategies ensure businesses maximize savings while simplifying compliance.
Key Points:
- Early engagement with appraisers can streamline the ad valorem tax process.
- Look-back periods allow businesses to recover missed severance tax savings.
- Proactive planning minimizes errors and reduces administrative burden.
Stephen highlights the importance of early engagement with appraisers and comprehensive documentation. By addressing ownership setups, royalty interests and working interests before notices are issued, companies can minimize errors and streamline appeals. Additionally, leveraging remedies, like correction motions, ensures that inaccuracies are resolved efficiently.
Tanner discusses the value of look-back periods offered by states for severance tax refunds. These periods, often spanning three to four years, allow companies to recover missed incentives or deductions for previous expenses such as marketing costs or infrastructure investments. Proactively capturing these opportunities helps reduce taxable value and improve cash flow. “Getting in front of this early and trying to capture it as soon as possible … makes it easier not only for your day-to-day but also for these state entities,” explained Tanner.
Mayur addresses common misconceptions that companies may have that can impact timeliness to initiate the refund process. When necessary, reactive strategies, including pursuing refunds for past oversights, ensure that businesses do not miss out on potential savings. He emphasizes how proactive measures, such as engagement with state entities, prevent delays and errors.
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Ad Valorem and Severance Tax Planning Series
Tune in for a comprehensive three-part series on ad valorem and severance tax, where Weaver’s tax professionals uncover hidden opportunities to optimize tax practices, reduce burdens and maximize savings. Don’t miss out on valuable insights that could transform your company’s tax approach!
